Vizsla Silver: The Making of a Billion Dollar Silver Company

• Vizsla Silver is advancing the flagship Panuco silver-gold project in Mexico with the goal of becoming a major silver producer
• Panuco is an enormous, high-grade district with 325 Moz AgEq resources that are still growing
• Vizsla made a major discovery at Panuco in 2020 that sent its stock soaring from $0.25 to nearly $3.00
• The company is fully-funded to complete a feasibility study in 2025 and transition Panuco to production
• Multiple upcoming catalysts including resource update, test mining, and feasibility study results

About Vizsla Silver

Vizsla Silver Corp. (TSXV: VZLA) (NYSE: VZLA) is a Canadian mineral exploration and development company focused on advancing its flagship Panuco silver-gold project in Sinaloa, Mexico. The company's goal is to become the next major silver producer in Mexico through the development of Panuco, one of the highest-grade undeveloped silver projects in the world. Vizsla is led by a team of mining professionals with a track record of discovering, financing and building mines in the Americas.

The Company is on a mission to become the world's largest single asset, silver-primary producer through its flagship Panuco silver-gold project in Mexico. CEO Michael Konnert recounts the remarkable journey of how Vizsla acquired this "monster district" in 2019 and quickly advanced it to be on the cusp of production just a few short years later.

The Panuco Story

The Vizsla Silver story traces back to 2017 when Konnert started Vizsla Resources as an acquisition vehicle to go after projects like Panuco. In early 2019, Konnert and his partner Craig Parry were introduced to the Panuco district in Sinaloa, Mexico through a business contact.

"It didn't take long at all to assess that this was a monster district," recalls Konnert.

"We drove through these road cuts and we saw all this huge hydrothermal activity happening and huge evidence of a big system there, plus the dozens and dozens of underground mines, the great infrastructure, all of these things really kind of came together really on that first site visit that led us to be confident to acquire the project."

Konnert and his team spent the rest of 2019 negotiating with the families that controlled the district for the previous two decades. By the end of the year, they had secured an option to acquire the project for $43 million. The only problem? Vizsla was a tiny $10-20 million company at the time with no track record of raising serious money.

"That was kind of the uphill battle that we had," explains Konnert. "We were confident that if we raised enough money and we're going to be able to drill enough holes, we're going to hit something spectacular...But the big hurdle was how do we convince the market that this little junior is going to be able to, first of make that discovery and then pay that $43 million US?"

Game-Changing Discovery in 2020

Vizsla's fortunes changed dramatically in the first half of 2020 when the company made a major high-grade silver discovery at Panuco, highlighted by 1,544 g/t silver equivalent over 8.2 meters. The stock price skyrocketed from $0.25 to nearly $3.00 within a few months. Konnert notes:

"That discovery was probably the highest grade discovery in decades in Mexico and silver. And it sent the stock running."

"Prior to that, we were trying to make anything work on the financing side. But one of the things that we did was we marketed the stock heavily as well too. So there was a lot of eyes on it."

Following up on the initial discovery, Vizsla drilled 6 meters of over 8,000 g/t silver. The company then raised $30 million from big name investors like Eric Sprott.

"Once we put that out, we raised $30 million from Franklin Templeton, Eric Sprott, and For Sale, basically a three-party financing. You know, prior to that, we were trying to make anything work on the financing side...It felt great."

Navigating COVID-19 Challenges

Just as things were looking up for Vizsla in early 2020, the COVID-19 pandemic hit, impacting the entire junior mining sector. Konnert recounts what it was like navigating this challenging and uncertain time as a CEO with a newly acquired, undrilled project and daunting option payments hanging over him.

Konnert credits the COVID challenges with bringing the team closer together. And by June 2020, Vizsla was back out drilling and making new high-grade discoveries that sent the stock soaring. The rest, as they say, is history.

A World-Class Silver Asset

Fast forward to today and Panuco has rapidly grown into one of the world's premier undeveloped silver projects. In January 2024, Vizsla updated Panuco’s indicated resource to 7.5 million tonnes grading 243 grams silver per tonne, 2.12 grams gold, 0.23% lead and 0.71% zinc for contained metal of 58.3 million oz. of silver, 508,000 oz. gold, 17,000 tonnes lead and 53,300 tonnes zinc.

"We've got 325 million ounces of silver equivalent here. It's the world's largest undeveloped high-grade, the qualifier there is a high-grade, but high-grade silver resource. And of course it's growing."

Some of the key aspects that make Panuco a standout silver asset include:

• Huge, consolidated land package with most veins open laterally and at depth
• Classic Mexican silver-gold epithermal vein field with over 80 known veins
• Exceptionally high silver grading 243 g/t silver equivalent
• Significant proportion of resource starts right at surface
• Newly discovered blind veins, like the Copala Vein which averages 10m wide at 600+ g/t
• Existing infrastructure including roads, power, water, and a 500 tpd mill
• Low quartile projected AISC costs of under $8/oz for first few years of production

"The backbone of that is Copala," explains Konnert. "Copala is on average 10 meters thick, so 30 feet thick. Average grade is over 20 ounces silver equivalent. That's know, 600 plus grams silver equivalent. That's extremely high grade. And we are silver primary. It's about 60, 40 silver gold."

"This vein, this Copala Vein runs for a mile long and it's open in each direction. So we haven't even finished that off yet. All of the veins that are in our resource are open laterally and at depth, but not at surface because, or not up because it's basically they're all at surface, right?"

With 13 drill rigs turning, Konnert sees strong potential to not only expand the existing resource but make completely new high-grade discoveries.

"What we want to do as we develop the West, we put out this industry leading PEA, that's going to be a mine. We're going to push this forward. But as we do that, we want to show that there's the ability to make new big discoveries all the way outside of that PEA area into other areas of the district and beyond. We believe that in due time, this is a billion ounce district."

A Seasoned Management Team

One of Vizsla's key competitive advantages is the strength of its management team, which Konnert has strategically built out to help transition Panuco from exploration project to producing mine.

A key addition in 2022 was COO Simon Mortimer, who previously worked for engineering firm Ausenco where he built over 40 mines around the world, including Silvercrest's Las Chispas mine in Mexico.

"This is what they call the golden sidewalk where, well, we're on the edge of the golden sidewalk," notes Konnert. "I think we're fully funded and permitted. And of course, that's where we're gonna be in that golden sidewalk where you're basically going into production. But as far as de-risking goes, I think we're very close to getting into that mode there. And I think that the market probably underestimates how close we are to that."

Upcoming Catalysts

So what's next for Vizsla as it progresses Panuco down the development path? Konnert points to several key catalysts on the horizon:

• Updated resource estimate with greater confidence level (Q1 2025)
• Kick-off of bulk sample test mining program (Early 2025)
• Results of feasibility study, possibly coupled with receipt of mine permit (Late 2025)
• Potential regional consolidation and new high-grade discoveries (Ongoing)

On the test mining program, Konnert notes: "We should be probably doing our first blast in the new year, early new year." The CEO believes this will be a major milestone that validates the project and shines a spotlight on just how close Panuco is to being a mine.

Investor Takeaway

With a market cap around US$600 million based on 325 million high-grade silver equivalent ounces, Vizsla appears undervalued compared to other silver developers. As Konnert points out, "even if it doesn't have a premium valuation, say you're at 0.6-0.7x NAV, at today's metal prices we're a billion dollar company."

The CEO believes Vizsla is entering its most exciting chapter yet as it advances Panuco down the development path with a top-tier technical team at the helm. A new resource, test mining, and feasibility study over the next 6-12 months could be game-changing catalysts that propel the stock higher as the market gains greater confidence in Panuco becoming a mine.

Add in the exploration upside across the district and the picture of a potential multi-billion dollar silver company starts to emerge.  As Konnert sums it up:

"You have basically a really clear line to multiple times re-rating based on just the simple things that we're doing that we're basically funded to do going forward. And then you have the upside of drilling. Drilling and discovery can create a huge amount of value."